Monthly Archives: July 2009

In Nassim Taleb’s article in the Financial Times this week, he recommends a massive overhaul to our country’s debt problems, both private and public. He suggests a debt-for-equity swap that, whether out of seriousness or wordplay, brings an innovative topic to the constant debate between more vs less stimulus. Taleb contends that throwing more money at troubled assets and expanding social services inevitably leads to more debt, a situation in which there are few winners. Burgeoning deficits heightens the risk of hyperinflation, leading to devastating consequences. His medicine consists of the transformation rather than the inflating of our current liabilities. In exchange for lower interest payments, a bank offers equity and the banks are able to finally shed light on their “toxic” assets. Right now, Americans are not in a state of hope that their troubles will be lifted by government interventions and an expanded social safety net. We are too smart, too immersed in history to succumb to this belief no matter how the cynics may view our people. Americans want solutions and, most importantly, want to engage and make the solutions come to fruition. In every great generation that this country has produced, political leaders have rallied Americans to fight against despair, to not accept what hand they are dealt, and instead, remaking this dynamic country to fit the times. In the President’s inaugural address, he called for Americans to sacrifice and to accept greater responsibility. I hoped for a new period that We Americans could have a stake in government and work to transform it for the better and, in doing so, make our own lives better. Unfortunately, no matter how well-intentioned the administration’s policies may be in the much larger role of government and increased social spending, these decisions have alienated or, at best, harnessed the innovative spirit of the American people. It is not that government’s size is the main issue, although that is a separate discussion. It is that Americans do not feel that they can have a stake in their destinies. We are a self-governing people, and whether the size of the bureaucracy is large or small, Americans desire a feeling that they can be the primary deciders, rather than some abstract entities. If the tone of the debate and the nature of the current policies were directed to this desire, we would be able to climb out a recession and thrive, as Americans have for Our history. Americans know that we have, through excesses and brought ourselves to this place. But give us a future to look at, and watch the tides change from doom and gloom to bright days. Nassim Taleb prescribed a radical shift from the status quo in relying upon debt to fund previous liabilities, and however unlikely, may in fact be the only solution to the current spiral. Instead of looking to the government to provide an answer, it is time for the government to look for answers in its citizens, the ones who create jobs, prosperity, and the key to delivering the real changes that are necessary.